I forgot to mention - The million dollar question is whether treaury yields will rise, stabilize or drop in the ensuing auctions.

Those arguing it will rise got a vote of confidence when european central banks increased their rates.

davidaexp1 said:Rates will rise. Foreign banks starting to raise. US has to raise to prevent money flowing out of US treasuries. Plus, summer is coming. Economy strong. Mortgage rates likely to rise. Will pull treasury curve upward.Aren't we not supposed to predict interest rates? or just me?

walletfart said:tooshy said:davidaexp1 said:Rates will rise. Foreign banks starting to raise. US has to raise to prevent money flowing out of US treasuries. Plus, summer is coming. Economy strong. Mortgage rates likely to rise. Will pull treasury curve upward.Aren't we not supposed to predict interest rates? or just me?

That was in the past. This time we KNOW we are right, I can just feel it...This is a very informative thread...my apologies to OP, just one comment if the housing bubble slowdown really gains traction, do you see rates continuing upward? However, rates should climb a bit more, I just feel it too....

Should we be concerned about default risk if we buy from a brokerage? That could happen I guess but I don't see it as likely that Fidelity or others would go under in the very near term, but for longer term treasuries, if you plan to hold to maturity, and if need to spread default risk (maybe I'm not using the correct words, ie. don't want all your eggs in one basket), I would buy from TD.

JayGatsby said:tooshy said:Should we be concerned about default risk if we buy from a brokerage? That could happen I guess but I don't see it as likely that Fidelity or others would go under in the very near term, but for longer term treasuries, if you plan to hold to maturity, and if need to spread default risk (maybe I'm not using the correct words, ie. don't want all your eggs in one basket), I would buy from TD.

Fidelity or TD going under would have no effect on positions in your account. Firm and customer accounts are segregated. The only default risk would be the US Gov't defaulting on the debt -- which I wouldn't worry about too much!

Exactly.

Treasury obligations are backed by the full faith and credit of the United States Government.

If that goes broke, you'll have much larger issues to worry about, anyways.

tooshy said:Where did I read that the ownership of the T-bills is your brokerage account? I was not really sure, hence my statement w/a question mark.

You're correct. The bills may be issued in your brokerage's name, but they are still owned by you. Rest assured that there are many SEC regulations that prevent your brokerage from trying to claim them as their own.

Since the rates are expected to rise, wouldn't it be prudent to wait till next fed meeting and buy T-bills after that?

Thanks for the information in this thread...

Beware the hikes of March

DreamR2I said:Since the rates are expected to rise, wouldn't it be prudent to wait till next fed meeting and buy T-bills after that?

Thanks for the information in this thread...

Beware the hikes of March

Good thought, but what if everyone expects a rate raise and it doesn't happen? Then rates would fall, if they have been priced into the market previously. I suppose you could follow a laddered approach similar to a CD ladder. Buy a little now, and a little later. Or leave in a high yield savings account for now and follow how the rates develop (that's my plan at this point). I've linked my HSBC account to TD already - so if the 4.8% goes away or becomes unattractive, it's just a click of a button to jump into T-bills.

I do anticipate 5% by April in HSBC

very informative post, green for the cute lil' brown cow!

AbbaZabba said:I'm considering opening the tradeking account with 100$ bonus for 1k. Can you buy these bills through them?

Apparently, you can trade Treasuries with TradeKing:
TradeKing Fixed Income Trading Desk 877-495-KING (5464)
Tradeking Commissions Page showing $24.95 flat fee for Treasuries

However, I doubt they specialize in fixed income and will give you the best deal. They seem much more geared towards option and margin trading. Also, they are fairly new, so perhaps there's some existence risk with them. There'a already enough market risk, why take a risk with your broker, too?